Hey Superstars,

I have a question, just like the title states does a discharged bankruptcy affect a seller in receiving a incentive from the lender?  I currently have a short sale in with Nationstar and I was told by the negotiator that they do not qualify for an incentive because they had a bankruptcy.  It is not a HAFA short sale either not sure why though.

Can someone shine some light on this issue..

Thanks in advance!

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I have had the same situation, Freddie. I had an owner-occupied home with Bank of America mortgage discharged in BK. Did a short sale, but the seller was not offered any incentive or program. But did he really need it in this case?

Really. I thought I was the one with this issue... The seller is being adamant about it because she was able to get the incentive with Chase, but Nationstar is telling her no. I'm not sure what's going on.

You should ask the seller to speak to their bankruptcy attorney.  They will probably have a quick answer on that one.

Is the property being reaffirmed ? If not, then why the short sale if the bankruptcy has already discharged the debt and they can turn it over to the bank?  Was the short sale started before the bankruptcy? Was the bankruptcy filed to prevent the foreclosure while the sale continued?  Sorry for all the questions, I do bankruptcy work with attorneys and have for 15 years and  there are too many questions to answer this.  

A short sale is a great solution once a client has a discharged especially if the property is vacant.  It gives the bankruptcy client peace of mind to get their name off of the title rather than wait an endless amount of time for the property to foreclose.  It's just another great solution for them.  Also, they are not required to give any financial information because they are protected under the bankruptcy law, though I do find that some lenders still ask for it but I let them know seller did a bankruptcy and is not disclosing.

Yes I do believe it is the best solution for the client... the property is vacant and the seller wants it off their name so that they can start the healing process now and instead of waiting on the lender to foreclose on the property.

The bankruptcy discharge extinguishes all personal liability of the borrower{s} Legally, it does not prevent the lender from paying the borrower a relocation fee. I do not know if their is a GSA rule that prohibits it, if the loan is a GSA loan. Hope this helps.

Steven Goldman, J.D.

Short Sale Consultant/Investor/Negotiator

Philadelphia, PA  267-205-6101

I am working on an FHA short sale right now where the seller filed bankruptcy last year and did not reaffirm the mortgage.  We got the ATP just this past Wednesday and it clearly states that the seller is eligible for the $1000 seller incentive.

Whose the lender? Yea my seller is not reaffirming their loan.

The negotiator at Nationstar could be wrong, could be right.

Was the loan sold?

Did just the servicer change?

Just because Chase offered it (probably a portfolio loan), doesn't mean Nationstar has to.  Each servicer, and investor , has their own matrix and guidelines.

Hi Wayne, I did mention to the seller that since it was a portfolio loan they were offered that nice little incentive :) I do need to find out who the actual investor is for this particular loan.
Who is the investor? If it's a loan that was originated by Aurora and aquired by NationStar, all bets are off.

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